Liquidations

When liquidation opens

Liquidating an account

A liquidator repays part of one of the account’s borrows and receives the account’s collateral in return, worth the amount repaid plus the collateral reserve’s liquidation bonus.

• One call repays up to 50% of a borrow. A borrow worth less than 100 USDC can be repaid in full.
• The liquidator chooses which borrow to repay and which deposit to receive.
• Each call raises the account’s health; liquidation stops once it is back to 1.

For example, repaying 500 USDC against SOL collateral, whose bonus is 5%, returns 525 USDC of SOL.

Liquidating a position

A range or perp at maintenance is closed whole, with its own tokens. The liquidator brings no capital.

1. 1

   Anyone calls the liquidation

   The program checks the margin ratio against the oracle price.

2. 2

   The pool unwinds the position

   A range’s liquidity is removed. Held tokens are swapped into the tokens owed.

3. 3

   The reserve is repaid

   Debt and accrued interest return to Lend.

4. 4

   The liquidator is paid

   A fee on the position’s value, taken from the remaining margin.

5. 5

   The owner keeps the rest

   What is left returns to the owner’s account as a deposit.

The backstop

Each reserve keeps a backstop balance, built from 20% of its reserve factor income. When a liquidated position’s tokens repay less than it owes, the backstop pays the reserve the difference, and the value of suppliers’ shares is unchanged.

Running a liquidator

Liquidation needs no permission and no registration. A liquidator reads accounts and positions, computes health and margin ratios from the same oracle prices the program uses, and sends liquidate_account or liquidate_position.

Account liquidations need the token being repaid. Position liquidations need only the transaction fee. Both instructions are on the Program reference.